Housing Prices Still Rising

The good news (if you’re an existing owner) is that home prices in the U.S. have continued to rise. In the three months to February 2016, the Case Shiller index of home prices across a 20-city composite rose by 5.4% YoY.

The bad news? This represents the slowest annual increase in fourth months, with some cities barely registering gains on a month-on-month basis (prices in New York rose by just 0.05% MoM.) With just 4.5 months’ supply of existing homes (4.4 for homes, and a slightly larger 5.0 for condos), low inventories in tandem with still low mortgage rates and strong job gains have bolstered prices. Nonetheless, today’s release is a reminder that what goes up must come down, even as many cities still have yet to see house prices return to their pre-recession peaks. For example: Home prices in Tampa, FL are up by 7.8% YoY, but are still more than 24% below the level of prices achieved in mid-2006.